8/15/2006 @ 8:30AM

Whole Foods Soars On Upgrade

Shares of
Whole Foods Market
rose 7.5% on Monday after J.P. Morgan upgraded shares of the natural and organic grocery chain to “neutral” from “underperform.”

Whole Foods
shares have largely corrected themselves and the company is growing “relatively faster” than other stocks covered, said J.P. Morgan analyst Stephen Chick in a report Monday.

The company’s “addressable market still seems to extend further into the $480 billion traditional food retail market than where Whole Foods stands currently,” he said.

The analyst said that while Whole Foods’ total sales target of $12 billion by 2010 “looks a bit aggressive,” it is “likely attainable eventually, depending on the rate of executed new store development, as well as the companys success of eventually penetrating the U.K.”

But the analyst also said he’s concerned with the company’s failure to open new stores as quickly as it signs leases, with store openings now taking an average of two years from lease-signing.

He said this is something Whole Foods will need to address in order to meet its aggressive 2010 sales target.